I never really ally with a faction. There are some advantages, but overall it limits the number of contracts you qualify for since other factions won't like you, plus normally a faction only has one or two special faction stores with goodies. Most factions (the main House Govs anyway) have a Flashpoint specific to you becoming an ally, but that is really the biggest benefit IMO.
I find it better to be nice to the pirates and buy into the Black Market. It is like having "Faction Stores" everywhere and you don't need to ally with the pirates. That way you can still be on good terms with everyone and your pool of contracts stays plentiful.
It means you need to balance your rep which can be a little tricky, but making the Local Government the OpFor when possible, a long with taking certain Flashpoints at certain times helps you work to make everyone happy with you.
I find it better to be nice to the pirates and buy into the Black Market. It is like having "Faction Stores" everywhere and you don't need to ally with the pirates. That way you can still be on good terms with everyone and your pool of contracts stays plentiful.
It means you need to balance your rep which can be a little tricky, but making the Local Government the OpFor when possible, a long with taking certain Flashpoints at certain times helps you work to make everyone happy with you.